The Court of Arbitration for Sport ruled that the Premiership club must pay more than £200,000 for their former player, who signed in 2009.

Casalinuovo had insisted he was a free agent when he arrived at Tannadice.

But Sarsfield claimed compensation for development and United have been told to pay £163,000 plus interest.

We are encouraged that the original claim has been reduced

Dundee United statement

A Fifa tribunal had previously reduced the initial claim of £333,000, but United have failed in a further appeal against the governing body's decision to the court in Lausanne, after a three-month wait.

United said in a website statement: "Dundee United note with disappointment the decision of Cas to only partially uphold our appeal and award 195,000 Euros in respect of training compensation to Velez Sarsfield in respect of Damian Casalinouvo.

"We are encouraged that the original claim has been reduced and will now consider the decision fully before making any further comment."

Casalinouvo only played 25 league games for United before moving to Hamilton Academical and then Raith Rovers.

The 26-year-old was forced to retire with a back problem in summer 2012 and has become an accountant back in his native Argentina.